First, diagnose the problem

In our third mentoring encounter, Edit Gardiner of TM Professional offers support and advice to an accountant named Tony.

Tony: My practice has been going the wrong way for a while. I approached the ICAEW to see if they had a mentoring scheme, but they didn’t. Just seeing the word “mentoring” on AccountingWEB was perfect for me.

Edit: When you say it’s been going wrong, can you define that?

Tony: I took over the practice 16 years ago. Over that time I have managed to reduce turnover by half. There’s stuff I’m not doing right. If I can talk to someone else, it can only help.

Edit: I have four staff, and now I’m taking more respite from day-to-day compliance work and doing more consulting type work. My absolute love is working with clients and getting involved in monthly business reviews. I often find with clients the intention is there, but there’s no direction and no change management. I’m hoping with mentoring I might be able to produce some ideas to help you. Have you been able to work out why turnover is dropping? Why are clients going?

Tony: I think it’s partly their age profile. In the first years after I took over the firm I started seeing clients retiring or selling the business, and for whatever reason I could never get to be the accountant for that business. I lost big clients over the years and I’ve never been able to replace them with the same level of fees.

Edit: In terms of what you offered those lost clients and what they need, do you think they match?

Tony: I’m very much a general practitioner. I believe clients will know what my offering is. I do what all high street accountants do. I would hope they match, but I don’t know.

Tony: No, it’s all compliance-driven. I’m not into added value services. I don’t do management accounts.

Edit: Are you a sole practitioner?

Tony: Yes, and I work on my own.

Edit: When clients leave, do you get an impression why they go?

Tony: I lost two clients in the autumn of 2010 - an estate agent and a doctor. In the doctor’s case they came back. They moved to an accountant who was more specialist. But the reality for them was different, which is why they came back. The estate agent went to a large, independent firm that could offer a wider range of services, for example IHT and tax - the high-level stuff.

Edit: The way I see it, you’ve got choices. For example, you can specialise, you can offer added value, you can set up partnerships with IFAs and so on. Have you thought of where you want to take firm? Have you thought of an ideal outcome?

Tony: I thought of specialising, but find it daunting. What’s going to make them come to me? I’m not a natural at marketing.

Edit: So you’re not the person I’m going to see at networking events looking to make alliances. Is that lack of confidence?

Tony: Yup. Lack of confidence. But I’m happy to be a general practitioner.

Edit: From my perspective, if you’re building a compliance-based practice, it would either be a firm based around yourself with low overheads, or building a big pyramid with a lot of people at bottom, with you overseeing them at top, driving through volume.

Tony: I have no desire to shoot the lights out or change the world. If I can get turnover 50% up with my low overheads, it would give me a level of profit I would be happy with. It’s work/life balance: I have no desire to change, though I will subcontract out in the right circumstances.

Edit: So, what we’re aiming for is a compliance base, mainly working for yourself with potential for management accounts and so forth - achieving £60-£70k turnover with small overheads.

Tony: Yes.

Edit: Good. How are we going to get there? You don’t seem to be very involved with the business community and are losing clients for reasons we’re not quite clear on. At this point we know your primary offering: you’re offering general practice services. Who are the clients and how are we going to get them? What kind of clients are we looking for then?

Tony: SMEs up to £1m turnover; owner-managed businesses at the small end of the market.

Edit: Are they going to have an internal bookkeeper? Will they have that resource in house?

Tony: They can have a bookkeeper, but if the client came to me to do the book-keeping, I can do it. I’m a Xero partner..

Edit: Do you have relationships with bookkeepers in the area?

Tony: No, in a word.

Edit: Do you think that something can be done on that front?

Tony: Yes, but in terms of relationships with bookkeepers, what would make it attractive for them to work with me? How do you get it going?

Edit: I don’t know if your area is same as mine. In our area there’s a pool of bookkeepers. Some of them will not do a trial balance, self assessment or accounts. Others work really proficiently off a trial balance. That works really well both for them and us - those bookkeepers can get lots of work from accountants, and even do working papers for the accounts, so the accountant effectively becomes a reviewer. There’s no reason why you shouldn’t be able to do that with bookkeepers, provided you’re clear on what you can offer them and you’re confident you can do it.

Tony: How do you get that relationship going with bookkeepers?

Edit: Clients with good book-keepers have a loyalty to their bookkeeper. So if you have a potential client with a good bookkeeper, you may hear the words, “I got xxx doing my books - they good.” Try to get them to introduce you. The other way is to go and network and build up your own pool of competent bookkeepers. It’s not going to happen overnight. It’s going to take time for you to find good ones.

Tony: I’m happy to think in detail about bookkeepers. Which other avenues do we go down?

Edit: It sounds to me like the clients you’re going for are probably under pressure themselves: little time, not enough staff and so on. The route to market is quite different. Try to figure out what would make you attractive to provide a service to them. Does that make sense? Why would that client find you a good solution?

Tony: It’s about having the confidence that I can take that pain away.

Edit: It’s about helping them. Why would you be an attractive solution to them?

Tony: Because I’m a professional and I know what I’m doing. How can I put that across to them?

Edit: When a client is looking, what is it that you can offer to them?

Tony: I don’t know the answer. This is part of my problem. I don’t communicate.

Edit: I think maybe you’re assuming that clients know what you’re about. But make it loud and clear. Are you approachable? What about business hours? What would make your firm attractive to them?

Tony: 5pm comes and I want to see my family. I don’t work extended hours and don’t wish to, but I am often in the office early, from 7.30 onwards.

Edit: Could you make that official, from 7:30 or 8am?

Tony: My official hours are 9-5.

Edit: Could that be considered as a way to differentiate you?

Tony: Yeah.

Edit: What else do you offer?

Tony: I don’t know.

Edit: If I’m a busy person trying to run a business, you should offer a solution that would make my life easier.

Tony: It might be back to Xero - it’s wonderful that you can log in and solve problems over Skype.

Edit: That’s absolutely fantastic. Being there to do it in real time. So you got real-time help with bookkeeping, and some early hours. What about the fact that you work on your own? Can you turn that to your advantage?

Tony: Absolutely. The doctors said they left because I work on my own, but that was also part of the reason they came back.

Edit: So they’re not pushed from pillar to post, they work with you. They’ll be buying into you, getting the advantage of early hours, and getting things sorted out quickly, using online help. Strangely enough I don’t believe these kinds of clients are looking for an accountant. You will find them when they’re looking for sales opportunities. SMEs try to do lots of things themselves, and often the owners/decision makers will be seeking sales opportunities themselves. My primary outlook for you would be networking organisations where they are doing their marketing. But you may have an issue with confidence and perhaps networking isn’t primary to your working life.

Tony: I’m in the middle. I do a bit. I want to make best use of my time. If you say this type of networking is effective I’ll give it a go.

Edit: I divide networking to three types: referral type networking, where there’s one accountant, one plumber, one bookkeeper and so on. They tend to be smaller number groups, but very focussed, and meet frequently. Then there are other more informal networks, which serve two purposes: firstly, they are there for “opportunistic” sales, since someone in the room might actually be looking for what you are offering at that time, but they are also good for building up relationships, although that will take a little longer. The third type are the seminar type networking groups, where there is a common interest area that the participants have. These are good if you specialise in a certain field for example.

Tony: I feel this should be long-term project. It won’t resolve itself fast. If I go out network, it will take time.

Edit: I’m happy to offer time. Initially we could have a conversation every couple of weeks, and then monthly.

Tony: I like that idea for the first few weeks.

At the end of this session, Tony and Edit agreed some targets for Tony to undertake: 1) Find out about networking organisations and opportunities in his area. 2) Consider how to approach book-keepers. 3) Consider whether asking for referrals from existing clients could bring in fees. Come back in a fortnight or so to find out how he got on.

I found this article very interesting and fairly relevant for what I might consider doing in the future too. I'm currently self employed and pregnant and was thinking of going back to employed work once I had the baby and was ready as I felt myself struggling and working for myself to be almost a hobby! However, reading this has made me think that I can maybe consider working for myself once I'm ready and technically up to speed again. Its highlighted the things I need to think about if I want to generate enough income just to be comfortable and have a good work/ life balance.

A special mention in this case for Tony and Edit for sharing their conversation. I hear that things are already progressing and will be back in touch with them shortly to hear how Tony's doing.

I'm glad that other members are finding the mentoring project useful, and we will be assigning more mentors and mentees in the weeks to come.

@Lilac - Also glad to see your interest in going into practice reviving. If this is the case we can help on AccountingWEB via our Start up practice page, which is designed to cater for people like you. A good starting point would be to download our PDF guide to going solo, but there's a regular supply of advice and background information for you there.

But with a new baby to manage, if you're not certain of your ability to commit long-term to your own practice, perhaps subcontracting would be a good alternative, or a way to test the water. We can help here, too, via our Opportunities page. Just select the "Subcontract work sought" option when posting your request and you should get a few replies (particularly during Dec-Jan, I suspect).

Welcome to the AccountingWEB mentoring project, sponsored by BTCSoftware. This blog will act as the hub for accountants to get advice and support from more experienced practitioners. To get the scheme rolling, participants will share their experiences with mentors put forward by BTC. Their discussions will be summarised in posts on this blog so that AccountingWEB members and practice experts can add their suggestions and advice. Register now if you would like to make contact with a mentor. If you would like to offer advice in that capacity, send me private message with details of your availability and areas of expertise. - John Stokdyk, Editor